Retail sales dropped 0.2% in May, the first drop in 11 months, but economists were expecting a 0.4% to 0.5% drop so stocks are rallying on the news plus some favorable earnings today (S&P 500 +16 to 1288). Meanwhile rates are up as mortgage bonds sell sharply (FNMA 4% coupon -62 basis points) on inflation
China
Over the next month I will examine monetary policy in my weekly pieces. To start, I am recycling this piece I wrote last July. Eternal thanks to economist Steve Hanke of Johns Hopkins University who’s taken the time to educate me on these matters. Money Supply and monetary policy are set by the Federal Reserve.
Over the next month I will examine monetary policy in my weekly pieces. To start, I am recycling this piece I wrote last July. Eternal thanks to economist Steve Hanke of Johns Hopkins University who’s taken the time to educate me on these matters. Money Supply and monetary policy are set by the Federal Reserve.
Rates ended last week up .125%, which is the smallest increment consumer rates can move. So if you call that a roughly flat week, then it’s the sixth week of flat rates. But this rise is the result of an inflationary tone building in markets, and the latest business and consumer inflation data are released
Inflation is the theme driving rates higher this morning as mortgage bonds (FNMA 30yr 4% coupon) are down 22 basis points and the 10yr Note is down 31 basis points to yield 3.59. Average 30yr fixed mortgage rates (on loans to $417k) had been holding just below 5%, but if this selloff holds, it would
Below are snapshots (with links) of five big data points markets are trading on today. U.S. rate markets—aka mortgage bond markets—are taking four of them as non-threatening: flat U.S. retail sales, weak Eurozone economic growth, less-than-expected Chinese inflation, and despite higher UK inflation, markets are shrugging it off. For now, markets are also ignoring the
China’s NBS site delivering “Server Too Busy” errors right now. Reminiscent of early crisis days when S&P servers started crashing on Case Shiller Home price release days. Anyway, consumer prices came in at +4.9% versus expectations of +5.3% and last month’s year-over-reading of 4.6%. And producer prices came in at +6.6% versus expectations of 6.4%
China’s NBS site delivering “Server Too Busy” errors right now. Reminiscent of early crisis days when S&P servers started crashing on Case Shiller Home price release days. Anyway, consumer prices came in at +4.9% versus expectations of +5.3% and last month’s year-over-reading of 4.6%. And producer prices came in at +6.6% versus expectations of 6.4%
Rates closed Friday 2/11 net even on the week, a nice break (despite wild daily swings) after rising .375% the week before. Rates could resume their rise this week in response to inflation reports from the U.S., China, and Great Britain. Inflation worries may cause investors to continue selling bonds, and home loan rates rise
Below is a snapshot of U.S. data for the week. There are also key inflation reports from China and Great Britain. Here’s what it all means.
Below is a snapshot of U.S. data for the week. There are also key inflation reports from China and Great Britain. Here’s what it all means.
Before presenting rate predictions for 2011, it’s worth noting that all forecasts are subject to the whims of highly volatile rate markets. What follows is an explanation of how rate markets work, how rates have behaved since the financial crisis began in 2007, then the outlook for this year. All rates discussed are 30yr fixed
This installment of bTunes is Brooklyn rap for the best finance blogger on the web. As the Talib Kweli gospel goes: “you gotta do, fuck that almost shit.” This perfectly defines the reformed broker Josh Brown and his command of the zeitgeist, whether arcane financial or inane pop cultural. The man is just as good
The rate climb discussed in recent weeks continues with Conforming 30yr fixed rates .75% higher than all-time lows October 7-8. This means a $184/mo higher mortgage payment for a loan of $417,000, and $323/mo higher for a loan of $729,750. Rates for Jumbo loans above $729,750 are only up .25% because these loans are not
Consumer inflation in China increased 5.1% from November 2009 to November 2010, and business inflation increased 6.1% for the same period. Food prices were a major inflationary factor, increasing 11.7%. Below are excerpts on consumer and business inflation from China’s full report, which some say is of questionable credibility. Still, this may cause China to
Mortgage bonds are down about 140 basis points as of 11:50am PT, which is worse than an already bad day until now. Rates were already up about .25% today alone, and if this latest drop holds rates could go up a bit more—rates drop when bond prices drop in a selloff; lenders watch mortgage bonds
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